What is the Avg (Average) Button in the Annuity Retirement Stress Test?

When evaluating an annuity, it can sometimes be useful to see how the annuity would behave in a very simple (if unrealistic) scenario: where gross returns are consistently average.

This removes the (more realistic) variability of returns and can help advisors understand the annuity's moving parts. (Often, annuity illustrations from insurance companies will include an average/fixed return example scenario.) The Avg scenario in the annuity section of the Retirement Stress Test allows an advisor to examine exactly this scenario.

Here you'll see how the annuity would behave and perform if the annuity's portfolio or index delivered average returns in every period of the plan, based on the annuity's asset allocation, index mix, and any limiting factors such as caps or participation rates and reductions in returns to adjust for missing dividends. The average returns for the annuity in this scenario will also depend on capital market assumptions and the plan's analysis type (Historical, Traditional Monte Carlo, Regime-Based Monte Carlo).